Even in the presence of ample oxygen, many organisms simultaneously utilize both the efficient aerobic pathway and the inefficient fermentation pathway for respiration. This behavior is called the Warburg effect (also termed overflow metabolism in bacteria) and has remained an enigmatic and poorly understood phenomenon despite years of experimental work. Here, we focus on bacterial cells and build a model of three trade offs involved in utilization of aerobic and anaerobic respiration pathways (rate versus yield, surface area versus volume, and fast versus slow biomass production) to explain the observed behavior in cellular systems. The constructed model also predicts changes in the relative usage of both pathways in terms of size and shape constraints of the bacterial cell, and identifies how substrate availability and environment influences growth rate. Furthermore, we use the model to explain certain complex phenomena in modern- and paleo-ecosystems like methane and carbon dioxide emissions in the wetland ecosystem and in the end-Permian extinction event, via the concept of overflow metabolism. These predictions from the model are not only testable in lab/field but also hold important implications for understanding such behaviors in ecological systems as well as for making relevant policies in conservation and climate change.